So What The Heck Is Wrong With Your Business?
Okay, if you read my previous post on doing a SWOT analysis, you should be more familiar with what's good and bad about your business and where you may be able to develop it in the future. If you haven't read the previous post I suggest you do a quick search on my blog for SWOT and take a little time to look at this critically as it is a very useful exercise to do -- especially when it comes to developing your strengths.
So what's wrong with your business? Let's find out…
Statistics show that around 90 percent of new businesses fail within the first two years, but most of the time this is due to glaring yet common mistakes. If only business owners would take the time to understand what it takes to run a business and learn about their market, many more businesses would succeed. People tend to give up too soon when they hit snags or realise it's not so easy to sell on the Internet (or anywhere else for that matter) as some would have you believe. Yet just by spending some time developing the right strategy instead of galloping off in the wrong direction, you can turn a seemingly hopeless business into a very profitable enterprise.
In my experience, there are several big mistakes that most business owners make -- see if any of them apply to you.
The wrong products
One huge mistake that business owners make is that they are trying to sell product that nobody wants. You have to focus on what people want -- not what you think they want or need. We all need dental fillings now and again, but do we want them? Do you see what I mean? There is a big difference between needing and wanting something and it far easier to sell something that somebody actually wants because they will be happy to part with their money -- even in a recession!
There are three main ways of choosing products to sell:
- Develop something unique
- Sell what others are selling successfully
- Sell popular products but add a unique twist
One of the biggest mistakes people make is to sell popular products that everyone else is selling to a mass market -- just imagine how many people are out there watching for trends in the market and jumping on the bandwagon when something looks set to take off.
An example of this is the food supplement Acai Berry. Once word got out that this could be useful for weight loss, everyone and his dog started selling it on eBay. The market quickly got saturated and this pushed the price right down making it difficult for anyone to make a profit. You see this with all the latest fads, widgets or whatever the latest cool thing is. The problem with a commodity business like this is that you are constantly in competition with hundreds or thousands of other sellers and you end up in a price war that nobody wins.
Another problem with this type of selling is that many of these products have a very short life cycle -- fads and fashions come and go pretty quickly, so you end up constantly searching for new products and trying to race everyone to the market.
So what's the answer? Should you sell something unique? Well, yes and no -- it's always a good thing to have something unique and every business needs a genuine USP but it can be difficult to sell something without a track record. It can also be a lengthy process to get a new product off the ground unless you have backers with deep pockets or a ready market. It can become a bit of a gamble. However, unique products have the potential to be extremely lucrative, particularly if they are aimed at a targeted market and they solve a specific problem. I’ve always said that if you really want something unique, be first at being second!
One of the best ways to find products that people want without the uncertainty of launching something new and unique is to sell popular products (not necessarily fads and fashions, though – it has to be something with longevity) and add your own unique twist. You could combine a few products into a unique package or write a unique book -- books are popular but your writing will be unique…
Take a cool hard look at your own products and determine whether they are popular products, unique products or combination of the two and think very carefully about how you want to develop your products and services in the future.
Poor quality products
To be frank, too many aspiring business people start-up businesses on the Internet with shockingly poor quality products and expect to make a fortune within a matter of days. If you already own a business, then you know that it doesn't work like this. The reality is that there is ‘nothing for nothing’ in this world and you will quickly go out of business if you don't offer something worthwhile.
You can't begin to hope that you could sell back-end products to your customers if your front-end products are shoddy and worthless. Why would anybody buy rubbish from you more than once?
Take a critical look at your own products and services and however good they are now see what you can do to improve their quality. You should be striving for excellence and proud of the things you sell. Successful entrepreneurs are continually working towards building an outstandingly good reputation. You will never be more than mediocre if you are content to sell second rate products and services.
Most business owners and Internet marketers start off trying to appeal to a mass market because they are afraid they will miss out if they exclude large numbers of people because they are focusing on a small niche.
However, trying to appeal to a mass market is extremely challenging, not least because the Internet is such a vast edifice and it is difficult to get your website found when there are thousands, if not millions of competing businesses. It becomes a constant struggle to get traffic to your site.
However, if you appeal to a tight niche market, you can be a big fish in a small pond. When you focus on a small section of the market you are far more likely to be able to reach your customers and therefore make more sales. If you tighten your focus, your keywords and phrases are more effective and your targeted market will be far more responsive. Basically you can reach prospects who are closer to a buying decision with a niche market. I will cover this in more detail in later modules.
No marketing funnel
I’m astonished at how many Internet marketers are trying to develop a business with just one product. You really need to create a marketing funnel where you set up a series of related front-end and back-end products with incremental increases in price as you go through the funnel.
The problem with selling a single product is that you are constantly chasing traffic and trying to get new customers, as we saw with the commodity products earlier. With a marketing funnel you are able to approach your customers and ask them for another sale (assuming you have a good front end-product, of course). The most successful businesses are based on this type of repeat business from a list of loyal customers and it also adds a lot more equity value to your business if you ever want to sell it in the future (I’ve seen 10 x the equity value and more). Just that one step alone can add thousands of dollars to the income generated by your business.
You need to attract customers into the top of the funnel with lower priced products, samples, trials and freebies, then you gradually step them up to higher priced products. For example if you are selling gardening equipment, you could start off with a free packet of seeds, a low priced gardening book or garden design software then step up to plants, small gardening tools, lawn mowers, greenhouses and sheds. You could also offer garden services such as grass cutting and even landscape design services. If you want to diversify your business further, you could offer gardening courses as part of your marketing funnel. If you don’t fancy giving courses yourself, you could always pay someone to teach them for you or you could make an instructional DVD to sell instead.
Most businesses have plenty of opportunities to create this sort of marketing funnel and you really do limit your business by focusing on just one or two low priced products. Some businesses are able to develop business opportunities or franchises as their highest priced sales, so it is worth considering this too. I will be going into this in more detail in a later module.
Do you have a marketing funnel for your business? If not, you should think about how you can develop a series of related products.
To be honest most websites are pretty awful -- either they are getting plenty of traffic but not converting into sales, or the site itself is poorly designed and nowhere close to being effective. Your website is a major marketing tool, and we will look at ways that you can improve your website in future modules. Your website should be capable of converting high numbers of visitors into paying customers because it is effectively your main selling mechanism and your shop front. If it doesn't attract customers in and doesn't do a good job of selling, your website is letting you down badly.
Another mistake that people make when it comes to websites is that their site is all about them, not about what they can do for their prospects.
Your website should always keep your visitor as its primary focus, so work on providing what they want and consider all the ways you can solve their problems and desires.
You may have a perfect website that could potentially sell millions, but if nobody can find you -- you may as well not bother! Unless you have effective search engine optimisation in place, then nobody will know you even exist.
SEO is vital for any website and should be a priority if you rely on visitors to your website. It's totally bizarre how so many business owners spend hours twiddling around with ineffective marketing methods, yet neglect the most effective way of all to get heaps of free traffic to their site.
I will have a lot more to say about SEO in future modules but for now, I want you to understand just how important it is to work on your SEO. Without this, you cannot hope to attract anyone to your site unless you spend a fortune on advertising. Really effective SEO can bring visitors to your site in droves and push your business to the top of the organic listings -- which is exactly where you need to be.
Ineffective sales conversions
Okay, you may get heaps of visitors to your website but you won't make money if they don't convert into sales, or at least enquiries that you can build on to make sales in the future.
It is extremely disheartening to work hard on getting your site spot-on and attracting plenty of visitors but finding you can't sell anything. It's almost worse than not being able to get visitors to your site in the first place.
However, if your products and services are half decent and you are getting visitors to your site, you should be able to get them to buy by making a few changes. Basically, you have to take one of two approaches -- get people to buy from you now, or focus on getting their contact details so you can make your offer later.
For the past few years, there has been a move towards permission-based marketing, in other words, getting someone's permission to contact them and focusing on building a relationship with your customers.
Whichever way you choose, you need a slightly different approach. If you are aiming to make an immediate sale, you need great sales copy that pushes home the benefits of your products and services with money back guarantees and a powerful call to action -- maybe with a time limit, that will encourage them to buy now.
If you are aiming to get people's contact details, you need to persuade them to fill in that opt in form -- maybe by offering something for free that they can download here and now. It has to be something worthwhile, though, because people are getting more and more wary of giving their details because of the deluge of e-mails they tend to get as a follow up. It helps if you explain upfront how often you will be contacting them and make a solemn promise, if you can, that you will not share, sell or rent their details to anyone else.
This guarantee can go a long way to persuading someone to let you add them to your list. Also only ask for the bare minimum of contact details – first name and email is enough or you risk putting them off with too many questions. Don’t try people’s patience!
Consider which of these two approaches you will use in your business -- if one doesn't work, try switching to the other and see if that makes a difference. The key is to test and see which works best for your products and services.
If you can offer something free by post (or even if you ask for the postage costs to be paid) you will always have the name and full address to mail sales offers to. Although more expensive to do, physical mail often outperforms 5 to1, there is a reason why you get some much junk mail! More about this in later modules as if done correctly it can rocket your profits in 7 days or less.
Wasting money on ineffective marketing
Here's another reality check, most business advertising doesn't work. Yet business owners are talked into spending thousands of dollars on advertising campaigns that they don't need. Any new website that starts to make its presence felt on the Internet can expect to attract the advertising predators that are found in every area of the Internet and off-line media. No sooner do you get your website up and running than the phone rings and your e-mail inbox is deluged with advertising offers.
My advice is to say ‘Get Lost’ to the lot of them. Paid advertising is like a black hole that you throw your money into but you rarely get anything back. You end up in a nasty downward spiral where you are pressured to spend more and more money on advertising yet you end up frustrated and demoralised when it doesn't work.
I strongly urge you to stop advertising immediately and try some of the free and dirt cheap method of marketing your business. There really is no need to spend a lot of money on promotion. In later modules we will cover all these methods and you will see which ones will work best for your business.
Underestimating what it takes to run a business
I'm not going to go into a lot of detail here but suffice to say, that one of the biggest reasons why most businesses fail is that people underestimate what it takes to run a business.
Sadly, these days there is an all-pervading myth that running an Internet based business is completely effortless and will literally attract torrents of cash into your bank account 24/7 while you bask on a sunny beach in the Bahamas. Well, you and I both know that this is a long way from the truth. It takes a bit more effort than that.
People who really believe that it’s that easy, will quickly fall by the wayside and go back to bed, but even people who have a bit more staying power can find it difficult to make a success of any business because of the sheer time and effort it takes to get it set up and established.
Of course, once your business is running smoothly, it's perfectly possible to enjoy a residual income for very little effort.
However, you have to get through that tough period at the beginning and many people fail to keep at it because they don't have the qualities it takes to be a successful entrepreneur – or at least are not prepared to develop them.
This is such an important part of your success, believe me, paying attention to this will give you a colossal advantage over the vast majority of your competitors and it will have positive effects that will ripple through many other areas of your life as well. I promise, it's going to be a great awakening…
Giving up too soon
Studies have shown that it takes seven positive contacts with your prospects before you are likely to make a sale, yet most business owners give up trying after just one or two contacts, and some never contact the customer again thinking that they might ask for a refund! It really does pay to be persistent and keep up regular contact your list. Here are the figures:
50% of sales people give up after 1 contact
65% give up after 2 contacts
79.8% give up after 3 contacts
89.8% of those people give up after 4 contacts
Practically all salespeople have given up after 6 contacts
80% of sales are made on the 5th contact -- yet only 10.2% of salespeople are still following up!
94% of prospects will have bought after 7 contacts -- yet hardly anyone is still in touch with their prospects
If you are still in touch with your prospects after 8 positive contacts, you are likely to have made a sale if you are ever going to, so don't give up too soon.